Why Is the Market Excited by Disney All of a Sudden?
Yesterday, Disney’s stock price almost broke the $90 barrier, it might still be sometime today. That will give Bob Iger one thing he can claim which is all sunshine and puppies at the earnings call on August 8th. It’s pretty much the only thing, but at the end of the day, it’s the only thing stockholders care about.
So what happened? It’s not like Haunted Mansion blew it out of the water. The parks are doing the opposite of surging and Disney+ is still the Great Black Hole of Samba.TV Streaming Numbers.
What happened was Tom Staggs and Kevin Mayer.
Their company, Candle Media was hired by Disney to be consultants. Disney portrayed this as having Staggs and Mayer working for Disney again. Which they aren’t.
Okay, so why is the stock market so happy about these two?
Tom Staggs is a mid-westerner from Minnesota, got a BS from Minnesota U. And an MBA from Stanford. He did the investment banker thing for a while and earned a name for himself. Staggs joined Disney at the age of 29 and spent the next 27 years there which is a lot more than Iger ever did. Staggs is inculcated into Disney’s culture, and while he didn’t start as a street sweeper or anything like that he did grow up in the company.
Staggs was the CFO when the Pixar purchase happened so he gets a lot of credit there. That feather in his cap got him bumped up to CEO of the Parks where he did a lot of Iger’s expansions before the suck set in with Chapek. He was bumped up to COO and worked hand-in-glove with Bob Iger. He was a natural choice to succeed Iger as CEO of Disney.
Problem: Iger also saw him as the man most likely to take his job away from him. This was a significant roadblock in Iger’s plan to be the king of the Walt Disney Company until the day he died and then rule it from beyond the grave somehow.
Staggs left… Suddenly and mysteriously, for no apparent reason in 2016.
Kevin Mayer was Disney’s tech guy. Got his bachelors from MIT, an MBA from Harvard, and got a tech master’s from San Diego. He started at Disney in 1993, and followed a more Generation X career path, whenever he wanted a promotion he had to get a job at another company.
He left Disney in 2000 to be CEO of Playboy.com. Mayer correctly assessed the future of softcore and a gave Playboy.com a glow-up as nostalgia bait. He quickly jumped ship to…
… Clear Channel???
So yeah, from there he was lured back to Disney by Staggs to be the tech guy on the Pixar merger. They worked together off and on for the next few years at Disney. Mayer oversaw the initial success of Disney+. He made ESPN+ a winner and also ran Hulu when Disney got the majority of the company in the Fox buyout. He was viewed as a potential successor to Iger.
But before Iger to fully turn his Sauronic gaze upon him, there was a board coup in February of 2020. Iger was immediately out as CEO and would be given a gentle departure as Chairman of the board.
It is in hindsight that Iger got the boot over the Fox acquisition and Covid brought matters to a head. Disney was going to need to gear down and who better to do that than Budget-Cut Bob Chapek?
Getting clipped out by the Boomer Network was a very Generation X thing indeed.
Since he was now a failed prince-candidate for the number one job at Disney he bailed again.
He became CEO of Tik Tok and made that company what it is now. Then he and Staggs got together and formed Candle Media. Candle owns some very strong brands, the biggest is Moonbug (meaning Coco Melon).
That means they are getting outside money.
Which is coming from Blackstone (very much not to be confused with Blackrock). I’ll be taking a closer look at some of Blackstone’s activities soon. For now, I’ll say they aren’t interested in “stakeholder capitalism.”
So what does this mean for Disney?
Nothing at all they are just advisers. There is no way in hell that Bob Iger is going to be bringing two pretenders to his throne back into his Burbank kingdom. Especially when his support on the board is looking very iffy and he did such a thorough job of demolishing Chapek that anybody that does get brought in as a new CEO will be demanding that Iger be just as completely destroyed.
These guys are not the saviors of Disney because Iger won’t let them save the company.
The stock market is excited for no reason.
Okay, I’m done here.